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TMI Blog2015 (11) TMI 1579X X X X Extracts X X X X X X X X Extracts X X X X ..... rough projects and assignments contracted to it by their principals abroad. Thus, according to us, DRP was justified in directing exclusion of persistent Systems and Solutions Ltd, considering the functional profile of the assessee as dissimilar from that of Persistent Systems and Solutions Ltd. - ITA No. 137/Bang/2015 and Cross objection No.109/Bang/2015 - - - Dated:- 10-11-2015 - Shri. Abraham P. George, Accountant Member And Shri. Vijaypal Rao, Judicial Member. Assessee by : Shri. Ajit Tolani, CA Revenue by : Shri. Sanjay Kumar, CIT - III ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : These are appeal and cross objection by the Revenue and assessee respectively, directed against an assessment made by the AO u/s.143(3) of the Income-tax Act, 1961 ( the Act in short), pursuant to the directions of the DRP under section 144C of the Income-tax Act, 1961 ( the Act in short). 02. Appeal of the Revenue is taken up first for disposal. Revenue has altogether taken six grounds out of which, grounds 1, 5 and 6 are general needing no specific adjudication. 03. Vide grounds 2 and 3, grievance raised by the Revenue is that DRP directed exclusion of expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verifying the reasons why TPO had rejected the contentions of the assessee. 06. Per contra, Ld. AR supported the order of the DRP. Reliance was also placed on the decision of Hyderabad bench of this Tribunal in the case of Pegasystems Worldwide India P. Ltd v. ACIT [ITA.1758 1936/Hyd/2014, dt.16.10.2015. As per the Ld. AR, Pegasystems Worldwide India P. Ltd, was also into software development services and the Tribunal had considered the comparability of Infosys Ltd, in the said case. 07. We have perused the orders and heard the rival contentions. It is not disputed that Infosys brand has a significant intangible value and it had revenue from software product segment also. Hon ble Delhi High Court in the case of CIT v. Agnity India Technologies P. Ltd [93 DTR 375], while affirming a decision of this Tribunal where it was held that Infosys Ltd could not be considered as a comparable, had upheld the view that it was a giant company in the area of development of software, assuming all risks leading to higher profits. Further in the case of Pegasystems Worldwide India P. Ltd (supra), which was also for the very same assessment year, this Tribunal had held as under at para 22 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnual report for year ended 31.03.2010 mentions as under : In the note detailing of the revenue recognition which also form a part of its annual report it has been stated that its revenue stream consisted of software development consultancy, engineering services, web development and hosting. Thus ICRA Techno Analytics had more than one segment. There is no case for the Revenue that the segmental results were separately available in public domain or was not obtained by the TPO from the said company, invoking the powers vested on him. In such a situation the DRP, in our opinion, was justified in directing exclusion of ICRA Techno Analytics Ltd from the list of comparables. 11. Ld. DR assailing the order of DRP for exclusion of Kals Information Systems Ltd, submitted that Kals Information Systems Ltd was a software development services company not a software product development company. As per the ld. DR though the assessee had stated that Kals Information Systems Ltd was a full-fledged product development company, the data which was relied on by the assessee for coming to such conclusion was not available in the annual report. As per the Ld. DR, the said company did not ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the TPO. According to him assessee had for the first time assailed its comparability before the DRP, while accepting it as a good comparable before the TPO. According to him, DRP had accepted the contentions of the assessee without verifying the data furnished by it. 16. Per contra, Ld. AR submitted that Persistent Systems and Solutions Ltd was rendering outsourced product development services and not any software development as such. According to him, its revenue was from sale of product software development services and segmental results were not available. Relying on the annual report of Persistent Systems and Solutions for F. Y. 2009-10, Ld. AR submitted that it was providing end to end product development services. Further as per the Ld. AR web-site of the said company clearly indicated that it was developing products like paxpro, ChemLMS, VieMOR, CLAP, e2GMigrator, TLALOC, eMee. Thus according to him, directions of the DRP were just and proper. 17. We have perused the orders and heard the rival contentions. No doubt assessee had raised no objections with regard to inclusion of Persistent Systems and Solutions Ltd as a comparable, when it was so suggested by the TPO. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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